An absolute gift is a gift of property that gives the recipient exclusive possession and control over the
property. Upon receipt of the gift, the recipient owns the property and may do whatever he/she
wants with it (subject to local laws regarding the use of such property).
In financing, acceleration occurs when the Debtor is in breach of a warranty or covenant in the
Debtor Agreement. Generally, this means the Debtor fails to make the agreed upon payments (the
Debtor has defaulted on the loan) and the Lender takes action to recover the entire loan, (sometimes
including applicable interest), immediately from a Debtor and/or a Guarantor.
Accord and Satisfaction of Debt Release
An Accord and Satisfaction of Debt Release is an agreement to release the Debtor of their obligations
under the Debtor Agreement. This can occur if the Debt has been paid in full or in certain cases,
where the Lender has accepted less than is legally due in order to reach a settlement. The Releasing
Party agrees to release any legal claims they have to the debt in exchange for an agreed upon
compensation. Generally, most corporations or individuals should have a formal Release or Wavier
drafted upon the loan being discharged or, otherwise agreed to being discharged at a lower amount,
so that they have a formal record of the legal release. This is important if the loan or promissory note
is secured and that security is registered to unregister the interest placed against that individual
lendor or legal entity.
Accrual basis refers to a method of recording earnings and expenses as they occur or are incurred
without regard to the actual date of collection or payment.
The applicable legislation of your jurisdiction.
Activity Waiver and Release
An Activity Waiver and Release is an agreement between two parties that releases a party providing
an activity from liability claims from an individual wishing to participate in the activity. The
Participant is required to give up all future claims against the other party, so care should be taken to
ensure that the Participant is fully aware of his or her rights.
Aggregate Authorized Shares
Aggregated authorized shares refers to the total number of shares that a corporation may distribute
or issue to shareholders.
Aircraft Registration Number
Aircraft over a certain weight are required to be registered with a national aviation authority. The
aircraft registration number is assigned to each aircraft by the Federal Aviation Administration when
the aircraft owner registers the aircraft. The registration number enables the aircraft regulatory body
to keep track of all aircraft that are registered for private use.
A resident (foreigner) that belongs to another country and who has not yet obtained citizenship by
An alternate attorney-in-fact is someone who is appointed to act as attorney-in-fact if the primary
attorney-in-fact is unable or unwilling to continue acting for the principal. While it is a good idea to
appoint an alternate attorney-in-fact, it is not required. A third party (e.g. the principal’s bank) may
require proof that the original attorney-in-fact is unable to continue as attorney-in-fact before
accepting instructions from the alternate. Where two attorneys-in-fact have been appointed, the
document may state that if one dies or is otherwise incapable of acting, the other will continue as
An alternate beneficiary is a recipient of property through a Last Will and Testament, trust or
insurance policy when the first named beneficiary chooses not to or is unable to receive the
Alternate Health Care Representative
An alternate health care representative is someone who is appointed to act as a principal's health
care representative if the primary representative is unable or unwilling to continue acting for the
principal. While it is a good idea to appoint an alternate health care representative, it is not required.
An Amending Agreement is an agreement used to make changes to an existing contract or
agreement between two or more parties. The original agreement remains in effect, but one or more
changes are made to the terms of the agreement. Parties should be sure that their original
agreement does not contain a restrictive entire agreement clause which prohibits any changes made,
in which case a new agreement with a new entire agreement clause should be drafted. Generally,
most agreements allow for changes to me made or otherwise incorporated given that both parties
have agreed to the changes in writing.
An amendment is a change to an existing contract or agreement between two or more parties.
Amendments can be such matters as extending the term of the agreement, changing a payment
amount, changing the obligations of one party, etc.
Amortization is the amount of time (number of years) that it will take to repay the entire amount of a
loan or mortgage given a certain interest rate, amount of payment and frequency of payments.
An anatomic gift refers to the donation of organs or tissues for the purpose of transplantation or for
the purpose of dissection in the study of medicine. A living will can be used to make an anatomic gift.
An annual report is a publication provided to shareholders to describe the operations and financial
standing of a corporation. An annual report will typically include the auditor's report, summaries of
financial data, income and cash flow statements as well as the balance sheet. It will also include a list
of directors, a list of corporate capital, and a listing of shareholders including names, addresses and
number of shares held. It is published for the benefit of all shareholders and to satisfy regulatory
requirements. All corporations must file an annual report with the applicable regulatory body.
A marriage that has been declared null and void. Annulled marriages are considered never to have
Articles of Incorporation
The Articles of Incorporation is a document that is filed by the individuals organizing the corporation.
The Articles of Incorporation describe the purpose of the corporation as well as the share structure.
The Articles will also list the names of the individuals who are acting as initial directors for the
corporation. Any details of share transfer restrictions, and business activities will also be included in
the Articles of Incorporation. The actual rules governing the management of the corporation is
contained in a separate document called the Bylaws.
Artificial Life Support
Artificial life support refers to any medical procedure, treatment, or intervention which sustains,
restores, or supplants a spontaneous vital bodily function. In Wise Law BV’s Health Care Directive
and/or living will, this term does not include artificially administered food and water, or procedures
that are necessary to provide comfort or alleviate pain (including pain-relief medications). Also
known as life-prolonging procedures or life-sustaining procedures.
Artificially Administered Food and Water
Also known as tube feeding, this term refers to the procedure where a tube is put into a person’s
stomach (through the nose, or through a small hole in the abdomen). This is done for people who are
too ill to chew or swallow by themselves or with someone else helping them. Without a feeding tube, such a person will die within days or weeks. Even with a feeding tube, the chance that a person will
live depends on the person’s overall condition.
As-is’ denotes that an item is being sold in whatever condition it presently exists. The buyer accepts
the item with all faults, even if these faults are not readily apparent. Buyers should take time to
thoroughly examine all items sold as-is before making purchases. A thorough examination may
include seeking an expert opinion. However, if the item being sold is misrepresented by the seller,
the as-is disclaimer may be unenforceable.
An assignee is the party which is transferring certain property, rights, or obligations under an
Generally, an Assignment transfers all of the rights and obligations that a party to a contract has to a
third party. The party assigning the contract gives up its rights in the contract to the third party (who
becomes a party to the contract). In leasing, an assignment occurs when a tenant gives to a third
party all of his/her rights under the lease to a third party for the entire remaining amount of the term
of the lease. If this original tenant assigns the lease and the landlord consents to the assignment, that
original tenant no longer has any rights to the property nor any obligations to the landlord under the
Assignment of Partnership Interest Agreement
An Assignment of Partnership Interest Agreement is a contract for the transfer of a partnership
interest from one entity to another to the extent permitted by the original partnership agreement.
An assignor is the party receiving property, rights or obligations under an assignment.
Generally, an assumption is the act of taking possession of or power over something. In real estate,
an assumption is an agreement whereby a buyer takes responsibility for an existing mortgage on a
property that he or she is purchasing.
An attending physician is a physician licensed by the jurisdictional board of medicine, selected by or
assigned to a patient, who has primary responsibility for the treatment and care of the patient.
Generally, an attorney is a person legally appointed by another to act as his or her agent in the
transaction of business, specifically one qualified and licensed to act for plaintiffs and defendants in
legal proceedings. In a Power Of Attorney document, the attorney is the person appointed by the donor to manage his or her financial affairs. The attorney does not need to be a lawyer. This term is
used in Canada, Australia, and the United Kingdom. In the United States, the correct term is
The attorney-in-fact is a person appointed in a Power of Attorney document by a principal to manage
his or her financial affairs. The attorney-in-fact does not need to be a lawyer. This term is used in the
United States. In Canada, the United Kingdom, and Australia, the correct term is "Attorney".
Automatic Renewal Lease
An automatic renewal lease is a lease that continues indefinitely on the agreed upon period (weekly,
monthly, or yearly) until either the tenant or the landlord gives notice to the other party that they
will be terminating the lease. The notice required is the greater of the notice required in the
applicable legislation in your jurisdiction and your lease.
Band Partnership Agreement
A Band Partnership Agreement is a formal contract between two or more individuals, that
establishes a general band partnership. A band partnership agreement describes the rights and
responsibilities of the members to each other and to the band. A band partnership agreement will
describe how decisions are made by the band, how members of the band are added and removed,
and how profits are to be distributed.
A bank draft is a check written by one bank on its account with another bank. A bank draft is an
extremely secure (safe) method of transferring funds. A bank draft, while generally considered more
secure than a certified check, can still see funds withheld under anti- money laundering laws
depending on the amount and the jurisdiction.
Base rent is the minimum or base amount of rent payment as set out in a lease. Base rent does not
include percentage rent or any amount for additional or operating costs such as utilities, etc.
A basement suite is a self-contained dwelling unit in the basement of a house, complete with its own
kitchen, bathroom, living area and a window. You will need to check your local municipal legislation
(such as land use bylaws) to determine if you can have a basement suite in your house.
A beneficiary is the recipient of property through a Last Will and Testament, trust, or insurance
policy. A beneficiary in a trust document is the legal person(s) who hold(s) equitable interest in the
trust asset. Generally, the settlor has designated the equitable interest in the assets to the
beneficiary in the trust document, subject to the terms of the trust and the discretion of the trustee.
To bequeath is to give property or money to someone (a beneficiary) in a Last Will and Testament.
Bill of Sale
A Bill of Sale is a document that transfers the ownership of property from a seller to a purchaser. A
Bill of Sale can also act as a sales receipt.
Board of Directors
A board of directors is the governing body for a corporation. The directors are elected by the
shareholders and are responsible for establishing corporate policy, selecting officers, and making
major business decisions. Directors and officers of a corporation generally have an implied fiduciary
duty to the other shareholders of the company.
Also known as an “Owners Corporation” or “Condominium Corporation.” With respect to unit titles, a
body corporate is the entire group of all the owners of lots or units which share common property.
Body Corporate Bylaws
Body Corporate Bylaws are the rules governing the internal management of a Body Corporate. The
bylaws may specify rules relating to noise, parking, behavior of guests, pets, garbage disposal and the
use of common property. The bylaws are sometimes referred to as a Community Management
A borrower is a person or corporation that receives value (money, property, or some service) from a
lender on the condition that the borrower will pay the principal amount plus any interest to the
lender at a later date.
Capital expenditure is money spent to acquire or upgrade (improve) long term assets such as
property, buildings and machinery. Capital expenditure does not include the cost to merely repair
A carrier is a person or corporation who delivers an item being sold to the buyer on the behalf of the
Cash Basis refers to a method of recording earnings and expenses only upon receipt or payment
without regard to when they occurred or were incurred.
Cash Surrender Value
The sum of money an insurance company will pay to the policyholder or annuity holder upon
cancellation of an insurance policy, usually a whole life policy, before it becomes payable on death or
maturity. Also known as "cash value", "surrender value" and "policyholder's equity".
Certificate of Incumbency
A Certificate of Incumbency is a document used to confirm the identity of the signing officers of a
corporation. Sometimes it also confirms the names of directors and shareholders as well as minute
book contents. A certificate of incumbency is often used to prove that a particular individual is
authorized to enter into legally binding transactions on behalf of a company. A Certificate of
Incumbency is also known as an Incumbency Certificate, a Certificate of Officers, an Officer
Certificate, a Register of Directors, and as a Secretary Certificate.
Certificate of Proof of Execution
A Certificate of Proof of Execution is a statement sworn by a witness where the witness confirms that
an agreement was properly executed by one of the parties to that agreement.
Certificate of Value
In Minnesota, a Certificate of Value is filed with a real estate transfer to provide the financial terms
of the property transfer, which is used in the administration of the state education aid formulas.
A certified check is a check for which payment is guaranteed by the bank. A certified check shows
that there are sufficient funds in the account to meet the amount for which the check was drawn. A
certified check is less secure than a bank draft but more secure than an uncertified check.
Certified Corporate Resolution
A Certified Corporate Resolution is a resolution of a directors' or shareholders' meeting that has been
certified as correct and accurate by the secretary of a meeting and approved by the president of a corporation. Certified Corporate Resolutions may be required by external organizations for specific
purposes. A bank may require a Certified Corporate Resolution for corporate signing authority or to
authorize access to a corporate safety deposit box.
Chattels are personal property. Chattels are distinct from real property or real estate in that they can
be moved from one location to another. Examples of chattels may include blinds, curtains,
microwaves, refrigerators, desks, and personal computers.
Child Medical Consent
A Child Medical Consent form allows parents or guardians to authorize another party consent to
medical treatment for their child(ren). It is typically used when parents and children will be separated
for an extended period of time, and the parent(s) will not be readily available to authorize medical
treatment for the child(ren).
Child Travel Consent
A Child Travel Consent form is a document that shows authorities and foreign officials that a child has
permission from parent(s) or guardian(s) to travel. The document may be requested in the following
- where a child is traveling with a school, church, or other organization;
- where a child is traveling internationally with one parent or guardian; or
- where a child is traveling internationally without a parent, with an adult who is not a parent or
guardian, or alone.
A native or naturalized member of a state or a nation who owes loyalty to its government and is
entitled to its protection.
The status of a citizen with rights, duties, and privileges.
A closed corporation is a corporation owned by a small number of people. The shareholders may also
participate in the management of the corporation. There are very few if any outside investors and as
a result there is no public market for the exchange of shares. It may also be referred to as a Private
Corporation or a Privately-Held Corporation.
Closely Held Corporation
A closely held corporation is a corporation owned by a small number of people. All or most of the
shareholders may also participate in the management of the corporation. There are enough outside
investors to support a public trade of the corporate shares.
A closing date is the date on which the seller of a property delivers the deed and the buyer pays for it
and can take possession of the house. Closing dates are typically 30, 60, or 90 days after the contract
is signed. People who are financing the purchase through a mortgage should ensure that the closing
date will occur before the mortgage commitment letter expires.
If your attorney-in-fact is a family member, you may happen to be joint owners of certain property. It
is important to state that this is acceptable in your power of attorney, so that third parties dealing
with your attorney-in-fact understand that the attorney-in-fact is entitled to co-own assets with you.
If this is not stated, the co-owning of assets could give rise to a conflict of interests on the part of the
A codicil is an amendment to a Last Will and Testament. A codicil is used when you are happy with
the contents of your will but need or want to make minor changes. A codicil leaves your original will
intact but makes specific changes, such as adding or deleting a beneficiary, a bequest, a guardian or
an attorney-in-fact. A codicil is executed in the same manner as a will.
Cohabitation is the act of living together in an emotionally and physically intimate relationship
without being married. The exact rights and benefits of a cohabitating couple vary by jurisdiction, but
they usually do not have the same rights under the law as a married couple.
A Cohabitation Agreement is a document outlining the terms by which cohabiting partners will live
together. A cohabitation agreement can be used to determine how finances, property matters, debt
obligations and support obligations will be handled during the relationship, as well as how they will
be handled if the relationship ends. In some ways, a cohabitation agreement is similar to a prenuptial
agreement for unmarried couples.
Collateral refers to assets that secure a debt obligation. For example, in the case of a mortgage, the
real property (house) serves as the security or collateral for the mortgage. If the borrower defaults
on the loan, the lender can seize and sell the collateral to regain some or all of the money lent to the
Comfort care refers to any treatment, including prescription medication, provided to a patient for
the sole purpose of alleviating pain. Artificially administered food and water is not considered
comfort care. The provision of comfort care may result in extending or shortening a person’s life.
A Commercial Lease is a legally binding contract made between a landlord and a business tenant. The
lease gives a tenant the right to use certain property for a business or commercial activity for a
period of time in exchange for money paid to the landlord. Additionally, the lease outlines the rights
and responsibilities of both the landlord and tenant during the lease term.
Commission is a type of compensation typically given to salespeople. Commission involves paying an
employee a percentage of the revenue earned from a sale that the employee has made. For
example, if a salesperson earns a 10% commission on sales he or she makes, he or she will be paid
$10 for making a $100 sale. Commission can be an employee’s sole form of compensation, or it may
be combined with a salary or hourly wage.
Common Law Marriage
Common law marriage is a relationship in which the parties live together and present themselves as
legal spouses, with all the rights and privileges associated with legal marriage. This extends to all
sexual orientations. In some jurisdictions, cohabitating for a certain period of time will automatically
constitute a common law marriage. Common law marriage is similar to cohabitation, in that the
couple has not gone through a legally recognized marriage ceremony. However, in jurisdictions
where common law marriage exists, the couple will usually have the same or similar rights and
benefits as a married couple who has gone through a legally recognized marriage ceremony. In
jurisdictions that permit common law marriage, the couple will generally need to petition the court
in order to dissolve the relationship (i.e., they must get a divorce). While the way in which this
contract was formed is not typical, the marriage itself is generally treated the same as any other, and
it considered a legally binding contract.
Common Law Partner
A common law partner is one half of a common law marriage, that is, “common law spouse”.
Common Law Partner Agreement
A Common Law Partner Agreement is a written agreement that governs the rights and
responsibilities of two adults who live together in a shared residence.
Compensation is the pay received by an employee in exchange for services provided to an employer.
Compensation typically refers to the employee’s salary, wages, or commission, but may also include
things such as health care benefits, vacation, stock options and bonuses. An employee's
compensation can be adjusted with a Compensation Agreement.
A Compensation Agreement is used to amend an employee's compensation (salary) in an
Consent to Action Without Meeting
A Consent to Action Without Meeting, commonly called a “resolution,” is a written document that
records an action or resolution authorized by the board of directors (or shareholders) of a
corporation. It is also known as a resolution in lieu of meeting. Where a directors’ meeting or
shareholders’ meeting can not be held, the same matters can be authorized by a Consent to Action
Without Meeting that is signed by all the directors or shareholders, as the case may be.
A continuing guarantee is a guarantee where the guarantor assumes liability for any past, present
and future obligations owed by a debtor to a lender or creditor. Even where the amount owing has
been completely paid, the guarantor can still be liable under that line of credit if there is a
subsequent indebtedness. Also known as a continuing guaranty. A common example is a guarantee
for a revolving line of credit.
Conveyance tax is a tax imposed on the transfer of real estate property. Usually there are two
conveyance taxes imposed on a transfer of real estate — municipal and state or provincial.
Conveyance Tax Certificate
In Hawaii, all documents evidencing real estate transfers that are submitted for recording must be
accompanied by a conveyance tax certificate. This form provides the Bureau of Conveyances with
information concerning the grantor, the grantee, the property, the consideration paid and the
Copyright is the exclusive legal rights of the creator or copyright owner to use or copy an original
work. The copyright owner also have the right to create derivative works from the original work.
Copyright infringement is the unauthorized use of copyrighted material. Copyright infringement
violates one or more of the copyright owner’s rights, such as the right to reproduce, make derivative
works or perform the original work.
The Corporate Bylaws is a document that describes the internal rules governing the management of
a Corporation. Bylaws do not form a part of the Articles of Incorporation and do not have to be
included with the initial corporate filing.
A Corporate Guarantee is a guarantee in which a corporation agrees to be held responsible for
completing the duties and obligations of a debtor to a lender, in the event that the debtor fails to
fulfill the terms of the debtor-lender contract. Also known as a corporate guaranty.
A corporate resolution is a written document describing the action taken by the directors of a
corporation. Resolutions may describe action taken during a board meeting or may have been
generated by agreement of the directors without a meeting.
Under law, a corporation is considered to be a legal person distinct from the shareholders who own
it. This means that individual shareholders are not personally liable for the debts and obligations of a
corporation. If a corporation fails, the shareholders will only lose the assets that they originally
invested to purchase their shares. In a corporation, income is taxed twice. First, the corporation pays
tax on any net profits. Second, the shareholders will pay personal income tax on any dividends they
receive from the corporation. The dividends paid to shareholders are paid out of the after-tax profits
of the corporation.
A creditor is a party that is owed money, property or services from a debtor or borrower.
Cumulative dividends are dividends that accrue at a fixed rate until paid. If a dividend is not paid in a
given year or period then it is carried forward and the shareholder would still receive those dividends
in a subsequent year when the dividends are finally declared and paid. Any outstanding cumulative
dividends must be paid before the common shareholders receive any payment.
Curtesy is a legal term meaning the common law property rights that a man is entitled to upon the
death of his wife, in any property that she owned or had fee-simple rights to during her life, provided
they have had lawful children born alive which might have been capable of inheriting those rights. It
is a freehold estate for the term of the husband's life. This word is different than the commonly used
variant courtesy which relates to showing manners.
Damage to Personal Property Release
A Damage to Personal Property Release is a general release tailored for the possible civil claims
following damage to the Releasing Party's property. The Releasing Party is required to give up all
known and unknown claims against the other party so care should be taken to ensure that the
Releasing Party is fully aware of his, her, or its rights.
A debtor is a party that owes a debt of money, property or services to a lender or creditor.
Declaration of Value
In Iowa, this document is filed when the real estate transfer is filed with the county recorder. The
Declaration of Value states the total consideration given by the Buyer to the Seller for the property.
Deed books are the books, files or record storage of the records in which a county government keeps
filed deeds and other important real estate related documents.
Deed of Reconveyance
A Deed of Reconveyance is a document that transfers title in real property to the borrower (Trustor)
from the Trustee once the borrower has fully paid the debt secured by a Deed of Trust. In order to
clear the Deed of Trust from the title to the property, a Deed of Reconveyance must be recorded
with the Country Recorder or Recorder of Deeds. If the trustee fails to record a satisfaction within the
set time limits, the trustee may be responsible for damages as set out by statute.
Deed of Trust
A Deed of Trust is a document where a borrower transfers the legal title for its property to a trustee
who holds the property in trust as security for the payment of the debt to the lender. If the borrower
pays the debt as agreed, the deed of trust becomes void and the lender executes a Deed of
Reconveyance. If, however, the borrower defaults, the trustee may sell the property at a public sale under the terms of the deed of trust. In some jurisdictions, a mortgage is used instead of a deed of
Generally, failure to fulfill an act or obligation. In lending, when a borrower has not met its legal
obligations according to a debt contract he or she is in default. For example, a borrower defaults on a
loan if he or she fails to make one or more scheduled payments. In leasing, when a tenant fails to
meet its obligations under the lease. For example, the tenant defaults if he or she does not pay the
rent when it is due.
Demand for Compliance
A Demand for Compliance is a form given by a landlord to a tenant when the tenant has already been
given a Notice of Lease Violation or Notice to Quit (for non-payment of rent and where the landlord
has not yet terminated the lease).
Demand for Compliance or Possession
Demand for Compliance or Possession is a document that can be used by a landlord after he or she
has served the tenant with either a Notice to Quit, Notice to Pay, or Notice of Lease Violation, but the
tenant hasn't complied. The Landlord is demanding the tenant to either comply with that notice or to
give possession of the leased premises back to the Landlord.
A Demand Letter is a letter that expressly states a legal claim and makes a demand for compensation
(restitution) for a breach of contract or legal wrong committed by the recipient. The demand letter
sets out: why the compensation is being sought; how it should be provided (e.g. payment in full,
payment over time, etc.); and a deadline and directions for reply. Demand letters are frequently used
to maintain some goodwill between business parties and they often encourage payment in order to
avoid expensive litigation. Most demand letters contain the “threat” that if the proposed condition is
not adhered to, the next communication between the parties will be through a formal legal
proceeding. Wise Law BV has demand letters for the following situations: debt owed, NSF check,
action required, and stopped payment on a check.
Demand Loan Agreement
A demand loan agreement is a loan agreement where the balance owing does not need to be repaid
until the lender demands to be repaid. In other words, the loan is repayable “on demand”. There is
no fixed end date for the repayment of the loan. Upon demand, the borrower is given a certain
period of time to repay the outstanding balance of the loan agreement.
Demand Promissory Note
A demand promissory note is a simple promissory note (or loan agreement) where the balance owing
does not need to be paid until the Lender demands to be repaid. In other words, the loan is
repayable 'on demand'. There is no fixed end date for the repayment of the note. Upon demand, the
borrower is given a certain period of time to repay the outstanding balance of the note.
The formal removal or expulsion of an undesired alien or other person from a state or country.
A deposit is money that a buyer is required to provide to a seller up front, in order to convey that the
buyer is serious about purchasing the property. The deposit prevents the seller from selling the
property to someone else. Usually, the purchaser loses this 'earnest money' if the purchaser fails to
complete the transaction. The deposit is applied to the purchase price if the transaction is
Generally, dissolution refers to the termination of a contract or other legal relationship. With respect
to partnerships and joint ventures, dissolution refers to the the termination of the partnership due to
certain events such as the death or bankruptcy of a partner.
A diversity immigrant is a person who has immigrated to the U.S. as part of the Diversity Immigrant
Visa Program (also known as the Green Card Lottery.) The Diversity Immigrant Visa program allots
50,000 permanent resident visas annually to persons from countries with low rates of immigration to
Generally, a dividend is a share of a surplus or something extra. In regards to corporate affairs, a
dividend is a payment made to shareholders out of the corporation's profits based on the number of
shares they own. Payment can be in the form of cash, new shares or even an ownership interest in
other corporate property. Dividends on preferred shares will usually be for a fixed amount each year
and may be cumulative or non-cumulative. Dividends on common shares typically vary depending on
the profits of the company. In bankruptcy, a dividend is a payment pro rata to a creditor of a person
In the simplest terms, a contested divorce is a divorce in which one of the parties does not wish to
receive a divorce (or is unwilling to agree to the other party’s terms). While mediation can often help
the divorcing couple reach an agreement, litigation or binding arbitration will be necessary if they
cannot agree. This type of divorce is very rare in the United States.
An Uncontested Divorce is a divorce in which both parties agree to all of the terms of the divorce.
This is the most common type of divorce in the United States, and in most jurisdictions simply
requires drawing up the appropriate papers and filing them with the court.
A donor is a person who uses a Power of Attorney to grant another person (attorney-in-fact or
attorney) authority to manage his or her financial affairs. The donor must be an adult. The donor
must also be capable of making his or her own decisions at the time the power of attorney is
executed. Also known as a principal.
Durable Power of Attorney
A durable Power of Attorney is a power of attorney which remains valid even if the principal or donor
later becomes mentally incompetent. A durable power of attorney becomes invalid upon the death
of the principal or donor. (Note: The principal must be mentally competent at the time the power of
attorney is made in order for it to be valid.)
Generally, earnest money is a sum of money given as a sign of one’s good faith. In real estate
transactions, earnest money is the cash deposit paid by the prospective Buyer to the Seller, as
evidence of good faith to complete the purchase transaction. This deposit will be credited to the
sales price upon closing but will be forfeited if the Buyer defaults. It ensures that the Buyer is serious
about obtaining the necessary financing and fulfilling the other conditions necessary to purchase the
property. Without earnest money, some buyers may not use their best efforts to obtain financing
and may still be looking for a better deal on other houses. Often, if the Buyer does not proceed with
the transaction, the Seller can keep the earnest money as damages.
The effective date of a contract is the date that the contract comes into effect. Unless the contract
expressly states a different date for the contract to become effective, the contract is effective on the
date that all parties sign the contract, or if the parties are signing on different days, the date the last
party signs the contract.
An employee is any person who performs services in exchange for compensation from an employer,
and whose responsibilities and duties are dictated by the employer.
An Employee Evaluation is a written document evaluating an employee’s performance for a period of
time indicated in the document.
within an organization. It outlines what information the company will collect from its employees, and
describes when and where personal information can be disclosed.
An Employment Contract is a contract (either written or verbal) which sets out the terms and
conditions for employment between an employee and an employer. LawDepot provides a written
Employment Contract. Also known as an Employment Agreement.
Employment Identification Number (EIN)
In the USA, the EIN (also known as the Federal ID number or FID) is a unique number assigned by the
IRS (Internal Revenue Service) to businesses for tax reporting purposes when an SS-4 form is
Employment Offer Letter
An Employment Offer Letter is a letter offering employment to a prospective employee. An
employment offer letter will typically describe the type of work the prospect is being offered, as well
as the compensation that he or she will receive in exchange for doing this work.
Employment Termination Letter
An Employment Termination Letter is a letter given to an employee by an employer, which
terminates the employment agreement between the two.
Encumbrances are legal rights or interests in land that limit the fee simple title to property. They can
include: zoning ordinances, mortgages, easements, liens, charges, pending legal challenges,
restrictive covenants, and unpaid taxes. Encumbrances do not prevent property transfers from
occurring, but the grantee must be aware that encumbrances will continue to exist after the land is
transferred from the grantor to the grantee unless the encumbrance(s) are otherwise discharged.
End User License Agreement (EULA)
An End User License Agreement is a contract between a software developer or vendor and the
purchaser of a computer software license that specifies how the software may be used. End User
License Agreements are designed to protect the copyright holder by preventing unauthorized use,
reproduction, or modification of the software. The End User License Agreement also defines the
warranties and support available to the user and defines the limits of the software publisher's
liability for any flaws. End User License Agreements are also referred to as Software License
Environmental Assessment Report
An environmental assessment report is a report created by an environmental specialist who
examines a property to determine if there are any characteristics of the property that are having a
negative environmental impact on the property. For example, this report would inform a real estate buyer if there were any underground storage tanks on the property that were leaking a contaminant
(such as gasoline) into the soil.
Escrow refers to the situation where the required funds (the purchase price) and documents
(transfer deeds) are held by a neutral third party (the escrow agent) until closing (when all the terms
of the contract have been satisfied). At closing, this third party delivers title to the property to the
buyer, commission to the realtor, and balance of funds to the seller.
An escrow agent is an independent third party who holds property in trust pending completion of the
terms of the Agreement. The escrow agent is responsible for collecting payments from the Purchaser
and giving those payments to the Seller. Escrow agents are administratively convenient for all parties
to sales transactions as they handle all funds, bills and documents relating to the sales transactions.
Both the Seller and the Purchaser can give the escrow agent instructions – for example, if the Seller
has failed to perform one of his or her obligations under the Agreement, the Purchaser can have the
funds necessary to fulfill that obligation withheld from the Seller out of his or her monthly payment.
Eviction is a legal process through the courts to remove a tenant from a property after the lease has
terminated or the tenant no longer is entitled to possession and the tenant will not give up
An Eviction Notice is a notice from a landlord to a tenant to vacate a certain property. Examples of
eviction notices would be Notice to Quit, Notice to Pay or Quit, Notice of Termination, Notice of
Lease Violation, Demand for Compliance and Demand for Possession. Generally, eviction notices are
notices given before seeking court orders for enforcing compliance, such as specific performance.
Refusal of entry into the U.S. by immigration officials.
Exclusive Agreement Clause
Generally, an exclusive agreement clause is a clause in a contract that prevents a party to the
contract from entering a similar contract with a third party. In the case of a Music Recording
Contract, an exclusive agreement clause prevents the artist from entering a similar recording
agreement with another recording company. An exclusivity clause is usually a necessary clause to
prevent the conflicts that would occur where two production companies attempt to market the same
Execute (a document)
When a person executes a document, he or she signs it with the necessary formalities. For example,
if there is a legal requirement that the signature of the document be witnessed, the person executes
the document by signing it in the presence of the required number of witnesses.
When a person executes a document, he or she signs it with the necessary formalities. For example,
if there is a legal requirement that the signature of the document be witnessed, the person executes
the document by signing it in the presence of the required number of witnesses.
An executor is the person responsible for administering or probating a person's estate upon their
death. An executor is responsible for probating the will, collecting the assets of the estate of a
deceased person, paying any debts of the estate, paying state and federal taxes, and distributing the
assets of the estate in accordance with the directions of the Last Will and Testament. Also known as a
personal representative. The executor is appointed in a last will and testament.
Federal Housing Administration (FHA)
In the United States, the Federal Housing Administration (FHA) provides housing mortgage loan
insurance to qualified applicants who get loans from certified lenders, guaranteeing the mortgage in
the event of a default by the Buyer. The FHA allows those who normally could not qualify for a
mortgage to qualify for one because the FHA will pay the mortgage in the event of a default. The FHA
helps those with poor credit history, those who cannot afford much of a down payment, and others
who for one reason or another are unlikely to obtain a mortgage from a regular mortgage broker. *In
Canada this is the Canada Mortgage and Housing Corporation (CMHC).
Fee simple is the greatest interest that a person can have in a parcel of land. The holder of a fee
simple has complete ownership with unconditional powers of disposition during the owner's life, and
upon death the property descends to the owner's designated heirs.
A fixed fee is a flat rate of payment that does not change.
Fixed Term Lease
A fixed term lease creates a fixed term tenancy. A fixed term lease has a specified end date (e.g. July
4, 2019), rather than one that is continuously renewed indefinitely (periodic tenancy).
Fixed Term Tenancy
A fixed term tenancy is a tenancy agreement that begins on a specified date and continues through
to a predetermined expiry date. A fixed term tenancy can have a fixed end date where it specifies the
exact day the tenancy will end or it can end after a fixed number of weeks, months, or years. The
advantage with a fixed term tenancy is that neither party has to give notice to terminate the lease, it
simply ends on the specified date. During a fixed term lease the landlord cannot increase the rent, or
change any other terms of the lease unless he specifically reserves the right in the agreement, and
the tenant agrees to the changes.
Fixtures are items of personal property that have been attached to land or buildings in such a way
that they cannot be removed without damaging the item, land or building. Chandeliers, custom-
made drapes, built-in appliances, built-in cupboards, window blinds, light fittings, and wall-to-wall
carpeting are examples of items that are usually considered fixtures.
A general partner is a partner who contributes money to a partnership, likely has a say in the day-to-
day operations of the partnership, and has unlimited liability for the debts and obligations of the
A General Release is an enforceable promise not to proceed with a legal claim in exchange for money
or other compensation. Also known as a waiver.
General Release of Claims
A General Release of Claims is a broad release from all possible civil claims resulting from a dispute.
Since the Releasing Party is giving up all known and unknown claims against the other party, care
should be taken to ensure that the Releasing Party knows its rights.
General Warranty Deed
A General Warranty Deed is a document that is recorded at the county recorder's office and which
conveys title to real estate from the Seller to the Buyer. As compared to a quitclaim deed, it contains
a guarantee from the Seller that the Seller is entitled to sell the property, that there are no
outstanding encumbrances other than those listed on the deed, and that the Seller will defend the
Buyer against any claims brought against the property by individuals claiming to have a prior interest
A Gift Deed is used to transfer an article of monetary or sentimental value to a family member or
friend. It can also be used to donate items to an organization of the donor’s choice, such as a
museum. The donor will retain physical possession of the gift until the gift is transferred, or the
donor becomes mentally incapacitated or dies. There are two types of gift deeds: revocable and
irrevocable. With a revocable gift deed, the donor keeps the legal document until he or she decides
to give the document to the recipient of the gift. The donor can, at any time, revoke the gift deed
document, and is not legally obligated to give the gift. With an irrevocable gift deed, the recipient of
the gift becomes its legal owner as soon as the donor physically delivers the gift deed document to
him or her. The gift cannot ever be revoked. In both cases, the right to obtain physical delivery of the
gift is postponed until the gift is actually given, or the donor becomes mentally incapacitated or dies.
Goods in Exchange
Goods in exchange' is a phrase used to indicate that one party will give goods to a second party in
exchange for something of value, similar to bartering. The goods in exchange can be in addition to a
cash portion of the purchase price.
Generally, a grantee is a person who receives a grant. In the case of a transfer of property by deed,
the Grantee is the person who receives an interest of the property from the Grantor and would
include everyone whose name will be on the title of the property once it has been transferred. A
person can be both a Grantor and a Grantee on a deed. For example, if John Smith currently holds
title to a home and he wants to convey half interest of that family property to his wife, Mary Smith,
John Smith would be listed as the Grantor, and John Smith and Mary Smith would be listed as the Grantee.
Generally, a grantor is a person who bestows or gives possession of something. In the case of a
transfer of property by deed, the grantor is the person who gives an interest that he or she holds in
the property to someone else (the grantee).
A United States identification card that serves as proof that its holder, a Lawful Permanent Resident
(LPR) has been officially granted immigration benefits, which include permission to conditionally
reside and take employment in the USA. Also known as a United States Permanent Resident Card.
Gross Rent Lease
A gross rent lease is a type of Commercial Lease where the tenant pays just a flat base rent without
any additional rent for operating or other expenses. The landlord is responsible for paying all other
expenses associated with operating and maintaining the property. Operating expenses may include
insurance, utilities, maintenance expenses and sometimes taxes.
Gross Ticket Sales
The revenue generated from ticket sales before expenses are deducted.
A guardian is someone who is legally responsible for a child who is not their biological child. A
guardian includes foster parents, parents who have adopted a child, or any adult who has been
granted custody of a child in a situation where the child’s parents are absent or deceased.
Health Care Directive
A Health Care Directive outlines a person’s wishes regarding medical treatment in the event that they
are incapacitated and unable to express these wishes personally.
Health Care Provider
A health care provider is any person who is licensed, certified or otherwise legally authorized to
administer health care in the ordinary course of business or practice of a profession.
Health Care Representative
A health care representative is a person that has been assigned in a medical power of attorney to
make health care decisions on behalf of someone else. A health care representative should not be:
someone who is mentally incapable; someone who is under the age of 18; a treating health care
provider; a non-relative employee of the principal's treating health care provider; an operator of a
community care facility; or a non-relative employee of an operator of a community care facility. Also
known as a Health Care Agent or a Health Care Proxy.
Homestead property refers to real property occupied by a person as his or her primary home or
dwelling place. An individual can only have one homestead property at any one time.
Hull Identification Number (HIN)
A Hull Identification Number is a 12 digit alpha-numeric number that all boats manufactured after
1972 are equipped with on their transom (the flat rear end of the boat). No two boats have the same
Hull Identification Number, so this number can be used to easily identify a specific boat.
I-134 Affidavit of Support
A form used by a sponsor in order to show that the immigrant being sponsored has adequate means
of financial support and is not likely to become a public charge. The Affidavit of Support I-134 must
be used by sponsors of aliens (foreigners) who do not fall within the definition of 213A of the
Immigration and Nationality Act (INA). This affidavit of support I-134 is also used by sponsors of
students and parolees as well as sponsors of diversity or returning resident applicants. Those
sponsoring family-based immigrants or employment based immigrants who are coming to work for
relatives or for companies where relatives of the immigrant own 5 percent or more of the company
must use the Affidavit of Support I-864.
A person who leaves one country to become a permanent resident of another country.
Immigration and Nationality Act (INA)
An Act which, together with other immigration laws, treaties, and conventions of the U.S., relates to
the immigration, temporary admission, naturalization, and removal of aliens.
Incapacity means that a person is unable to understand information relevant to making a decision
about the management of property, or is unable to understand and appreciate the foreseeable
consequences of making (or not making) a decision about the management of property. If a
principal/donor is incapacitated, he or she cannot create a valid Power of Attorney, Health Care
Directive or Last Will and Testament. Someone who is incapacitated cannot be appointed as an
attorney-in-fact or a health care representative. Also referred to as mental incapacity.
The legal process by which a corporation is created and organized in a specific jurisdiction.
The incorporation date is the date that the contact person authorizes the filing of this Corporation. It
is usually the current date unless there is some specific reason for wanting the corporation to not
exist until a certain day in the future.
An incorporator is a person or persons who organize a corporation and file the Articles of
Incorporation with the applicable government department. Once the filing is complete, the
incorporator's function is complete. After that the management of the corporation is performed by
the directors. All actions of incorporators and directors are subject to ratification by the
Generally, an injunction is a court order requiring a person or persons to do a particular act or refrain
from doing a particular act. In regards to confidentiality, an injunction is a court order preventing a
party from actually disclosing confidential information. This remedy is often more beneficial than
monetary damages for breach of a confidentiality agreement which may be insufficient due to the
nature of the confidential information. It also avoids the difficulty of measuring the damage caused
by actual disclosure of the information. In regards to trademark and copyright law, an injunction is a
court order preventing a party from using your trademark or breach your copyright. This remedy is
often more beneficial than monetary damages which may be insufficient due to the nature of the
breach. It also avoids the difficulty of measuring the damage caused by the actual breach of your
trademark or copyright.
An Inspection Report is a written account of any existing damage to leased property (premises).
Typically, an inspection report is completed at the beginning of the tenancy and at the end of the
tenancy. The landlord and tenant should both get a copy of this report. In some jurisdictions, an
inspection report is required upon moving out as a condition for the landlord to make a claim against
the tenant's security deposit.
Interest is an amount charged to a borrower for the use of the lender’s money. It is usually expressed
as a percentage of the amount borrowed and is specified as an annual interest rate.
To come into operation or take effect.
Inventory of Property Transfer
New Hampshire law requires all buyers of real estate to complete and file an Inventory of Property
Transfer with the New Hampshire Department of Revenue Administration within 30 days of closing.
It contains information relating to the circumstances of the sale, as well as the Buyer's opinion as to
whether or not the purchase price reflected fair market value for the property.
An Invoice is a standard sales agreement suitable for the purchase and sale of merchandise.
The invoice date is the date that an invoice was created by the seller.
Involuntary Withdrawal from Partnership
A process where a partner is withdrawn from a partnership without that partner's consent. Here the
partnership is giving notice to that partner. Examples of involuntary withdrawal are: death of
partner, incapacity of partner, disability of partner, incompetence of partner, breach of fiduciary duty
by partner, criminal conviction of partner, operation of law against partner, and legal judgment
Issued shares are authorized shares that have actually been issued or sold to shareholders. Un-issued
shares do not represent an equity holding in the corporation. A shareholder's equity will be
determined based on the total number of issued shares and will not include the remaining
authorized but un-issued shares. Note also that a corporation may own or purchase its own shares
but that this is different from un-issued shares.
Job Placement Counseling
Occasionally, an employer may offer to provide job placement counseling to a terminated employee.
Job placement counseling services help place the employee in a new job that is suitable for his or her
skills and level of experience.
If a principal to a Power of Attorney appoints more than one attorney-in-fact, he or she will have to
decide whether the attorneys-in-fact will be Joint Attorneys-in-fact or Joint & Independent
Attorneys-in-fact. Joint Attorneys-in-fact must act together. They must both agree before any action
can be taken, and they must both take the same action at the same time. If one is absent, or if they
do not agree, no action can be taken.
Joint custody is a custodial arrangement in which two parents who do not live together share the
decision making responsibilities for their child(ren).
Joint tenancy refers to an undivided interest in property, taken by two or more joint tenants. The
interest must be equal, accruing under the same conveyance, and beginning at the same time. Upon
the death of a joint tenant, the interest passes to the surviving joint tenant(s), rather than the heirs
of the deceased. This type of ownership is commonly used by couples who want the surviving
partner to receive ownership of the deceased’s share of the property. However, some states have
statutory provisions which deem joint tenancies to be severed upon the death of one joint tenant,
unless the joint owners have an agreement in writing stating otherwise. Other states have abolished
the recognition of joint tenancy altogether and will treat all instances of joint tenancy as tenancy in
common. It is important to understand how a specific state’s statutory provisions will affect the
ownership rights of both joint tenants and tenants in common if you are planning your affairs.
A Joint Venture is a business arrangement where two or more individuals or entities work together
for a single purpose and often for a limited time. It allows members to share development costs and
resources to create synergies and become more competitive economically, but without becoming
liable as general partners for the actions of fellow members. However, where the business
relationships between the members of a joint venture become too close, and revenues are
intermingled, the entity may resemble a partnership and will risk incurring the "joint and several"
liability that is typical of a partnership. Although all members of a joint venture usually have a view to
profit, they do not necessarily pool their profits and losses. Joint ventures are commonly used
between a local and a foreign company to facilitate the entrance of a domestic business into a
foreign market and vice versa.
Joint and Several Liability
Joint and Several Liability refers to the liability of more than one person, where each person can be
liable for the entire amount of damages done by all. For example, if a partnership was found liable
for damages and one partner was unable to pay their share, the remaining partner would be
required to pay all damages including the share of the delinquent partner.
Generally, the power, right, or authority to interpret, apply, and declare the law. In respect to courts,
jurisdiction refers to the authority of the court to interpret and apply certain laws with respect to a
specific matter in a specific territorial area. In respect to contracts, jurisdiction is a geographical and
political territory that has its own laws. It is a territory with boundaries, such as a state or a province.
For example, California is a jurisdiction in the United States, Ontario is a jurisdiction in Canada,
Scotland is a jurisdiction in the United Kingdom, and Queensland is a jurisdiction in Australia.
A joint will is a single will that covers two people. A joint will determines the distribution of property
in a certain way regardless of who dies first. Usually, all the assets go to the survivor but this
distribution is not a requirement for it to be a joint will. A joint will cannot be changed after one of
the parties dies. Accordingly, a joint will can be problematic if the survivor is young and his or her
circumstances change such that a change in the will would be required.
A landlord is an owner of land or a building who has leased some or all of the land or building to
another person or persons for a certain period of time.
Last Will and Testament
A Last Will and Testament is a legal declaration of a person (a testator) expressing his or her wishes
as to the disposition of his or her property or estate after death, usually written and signed by the
testator and two witnesses.
Lawful Permanent Residence (LPR)
Any person who is not a citizen of the United States but is residing in the U.S. under legally
recognized and lawfully recorded permanent residence as an immigrant. Also known as "Green Card
Holder," "Resident Alien Permit Holder," and "Permanent Resident Alien"
With respect to land, a contract between a tenant and an owner that sets forth the term of the
occupancy, amount of the rent and the conditions that the tenant must abide by to possess and use
the property. With respect to personal property or equipment, a contract for the rental of that item
that provides for the term of the rental, the cost of the rental and other terms and conditions of the
rental. With respect to a lease to own, a method of financing the purchase of property.
Leasehold improvements are expenses incurred for the permanent improvement to a leased
property. They are considered fixed assets and depreciate in value over the period of the lease.
Unless the lease provides otherwise, leasehold improvements become the property of the landlord
at the end of the lease.
Legal Land Description
Legal Land Description is how the government describes sections of land for the purpose of
government records and the determination of ownership. In North America, most jurisdictions use a
township and ranges system. The legal land description may be conveyed in various ways with the
most common way being a series of numbers, such as SW19-57-8-W5. Your legal land description
may be found on your land title, in tax assessment information, and in your mortgage agreement. It
is NOT your street address.
A lender is a person or corporation that gives something of value (money, property, or some service)
to a borrower on the condition that the lender will be repaid the principal amount plus any interest
at a later date.
Liability insurance is a form of insurance that is designed to offer specific protection against third
party claims. Payment is not typically made to the insured, but rather to someone who has suffered
loss due to the actions of the insured and who is not a party to the insurance contract. Liability
insurance generally does not cover damage that is caused intentionally.
Generally, a license is permission to do something that would otherwise be illegal. In regards to
computer software, a license grants a limited right to a customer allowing use of software according
authority to the licensee to use the licensor’s asset without which the use would be unlawful (such
as, were the property real property, trespass). People using a license to occupy or use real property
are referred to as occupants or guests and not tenants, as they do not share the same exclusive
rights to the real property as tenants.
A limited guarantee is a guarantee that is limited to a specific dollar amount (e.g. $25,000).
Guarantors are only liable for the debt up to the amount of the limit imposed in the guarantee. The
Lender would only be able to go after the Debtor for any amounts owed over that limit.
Limited Liability Company (LLC)
A Limited Liability Company (LLC) is a business entity that enjoys the more attractive features of both
a partnership and a corporation. It is similar to a corporation in that the liability exposure of
individual members is limited to what each has invested in the business. An LLC is similar to a
partnership in that it can be taxed at only one level. Like a partnership, income passes through and is
taxed against individual members as personal income. The exact tax implications of an LLC will vary
between jurisdictions. An LLC is managed by members or a management team.
Limited Liability Partner
A limited liability partner is a partner who only contributes money to a limited liability partnership
and does not have any control of the day-to-day operation of the partnership. His or her liability is
limited to the amount of capital he or she contributed to the partnership. Limited partners that
participate in management of the partnership are exposed to the same liability as general partners.
Limited partners have the right to participate in any decisions that affect their partnership interests,
such as amending the partnership agreement or admitting a new partner, unless these rights are
restricted by the partnership agreement. Their liability is limited to the amount of capital they
contributed to the partnership. A general partnership will not have any limited liability partners.
Limited Liability Partnership
A limited liability partnership is a partnership consisting of one or more general partners and one or
more limited liability partners. A general partner actively manages the business and may contribute
capital to the partnership. A general partner has unlimited liability for the debts and obligations of
the business. A limited partner will contribute capital to the partnership but will have no active role in running the business. The liability of a limited liability partner is limited to the amount of capital
they contributed to the partnership.
A living will allows you to express your wishes regarding specific medical treatments when you are
dying and unable to personally communicate those wishes. Also called a health care proxy.
LLC Operating Agreement
An LLC Operating Agreement is an agreement between members of a Limited Liability company (LLC)
describing the rights and obligations of the members in relation to each other and to the LLC.
A Loan Agreement is a legal contract that provides the terms and conditions of a loan. The loan
agreement is signed by both the borrower and the lender, and it sets out the rights and
responsibilities of all parties involved.
A lump sum is a one-time payment of money, as opposed to a series of payments. In a promissory
note or loan agreement, the lump sum payment is usually made at the end of the term of the note or
A partnership may have a managing partner who is responsible for managing the business. The
managing partner will make all the day-to-day decisions of the partnership. The managing partner
will have unlimited liability for the debts and obligations of the company. All partners in a general
partnership will have the right to participate in the management and control of the partnership
unless the management obligations are delegated to one or more managing partners in the
A master recording is the original audio recording from which copies can be made. When recording
to magnetic or digital tape, the recording is referred to as a “master tape.” When recording to a
computer hard disk, the finished recording is referred to as “session files.”
In musical recording, mechanical royalties are the royalties paid to a song writer. The rate of
mechanical royalties is completely negotiable. A minimum royalty is often defined in statute but is
typically reduced to 75% of the statutory minimum in a Music Recording Contract.
Mediation is a way to resolve disputes in a less formal, less rigid and generally more cost effective
manner than going to court. It allows both sides to talk candidly about their issues and bring all issues
to the forefront. Mediation is non-binding, the only binding element that can arise from mediation is
a negotiated agreement between the parties, but if that agreement is breached, they will most likely
still have to arbitrate or litigate. That being said, the cost savings of mediation and the opportunity
for alternate solutions that create gain for both parties, as opposed to a win/lose situation in
litigation, makes the process very appealing for small disputes.
Medical Power of Attorney
A medical power of attorney allows you to designate someone to make health care decisions for you
when you are unable to do so yourself. If you have a living will the decisions made by your medical
attorney-in-fact will be constrained by that document. A medical power of attorney assists someone
that has a living will, because your attorney can help in instances that are not covered by your living
will or in gray areas. In those cases your attorney can ensure the intent of your wishes is followed.
Minute Book Rights of Inspection
A Minute Book Rights of Inspection document outlines the different rights to inspect corporate books
and records for creditors, stockholders and directors. This document can be included in the
corporate minute book or in a policy and procedure manual.
The laws surrounding divorce in the United States are different when one or both spouses are in the
military. Even in an uncontested divorce, military divorces can be more complicated than civilian
divorces, and it is generally recommended that individuals going through a military divorce consult
an attorney who is familiar with this type of divorce.
A minor child is a child under the legal age of consent. This typically means that the child is under the
age of 18, though some states do not consider a person an adult until the age of 21. In certain
situations, such as if the child is married or is an emancipated minor, a child under the age of 18 will
not be considered a minor child.
A Minute Book is a written document containing a history of all key corporate records and
documents. The documents in a Minute Book include, among others, corporate articles, bylaws,
directors' resolutions, shareholders' resolutions and annual reports. Also included in the Minute Book
are minutes of shareholders' meetings and minutes of directors' meetings, which describe actions
taken and resolutions passed during any regular or special meeting of shareholders or directors.
Minutes refers to a written document that records items discussed at a board meeting, including
actions taken and resolutions passed.
Mirror wills are identical wills created by two people which leave everything to each other. A
husband and wife (or any other couple) can make mirror wills by each writing a Last Will and
Testament that leaves everything to the remaining spouse. Often, there is a clause that provides that
if the husband and wife die at the same time or within 30 days of each other, everything goes to the
couples' children or, if there are no children, to a named beneficiary. Unlike a joint will, there is no
prohibition on either testator changing their will before or after the death of one of the parties.
A Mortgage Agreement is a document where a mortgagor grants a mortgage interest in its property
to a mortgagee (such as a bank) to secure a loan from the mortgagee. A mortgage is most often used
to finance the purchase of property. Upon full payment of the loan, the mortgagee is required to
execute a satisfaction of mortgage. In some jurisdictions, a deed of trust is used instead of a
Mortgage Execution Date
The mortgage execution date is the date upon which a mortgage agreement was originally signed.
Mortgage Registration Date
The mortgage registration date is the date the mortgage was registered at the Office of the Judge
Probate, County's Office, Register of Deeds, or Land Registry Office.
A mortgagee is an individual or entity (such as a bank) that has lent money to a Mortgagor and
received a mortgage against the Mortgagor's property to secure this loan.
A mortgagor is an individual or entity that has borrowed money from a mortgagee (such as a bank) to
purchase property and granted a mortgage to the mortgagee against the purchased property.
Motor Vehicle Accident Release
A Motor Vehicle Accident Release is a general release tailored for possible civil claims resulting from
a motor vehicle accident. The Releasing Party is required to give up all known and unknown claims
against the other party, so care should be taken to ensure that the Releasing Party is fully aware of
The municipal description of a property is the street address of a property as it would be affixed on a
postage envelope. For example, 1234 Oak Street, Los Angeles, California 53322.
Music Recording Contract
A Music Recording Contract is a recording agreement used by a record company or other business
organization to enter into a contractual agreement with an individual, group or band for their
exclusive services as a recording artist for that company. A music recording contract usually has
renewal options, royalty breakdowns, distribution requirements and similar terms.
Mutual Consent No Fault Divorce (Pennsylvania)
If both parties have agreed that the marriage has ended and if both parties agree on the major issues
of the divorce such as: custody, support and property division, they can divorce by filing a Complaint
in Divorce package. After 90 days, both parties must file an Affidavit of Consent.
A Mutual Release is a General Release tailored for use when both parties claim that each other is to
blame for the injuries or damages that they have suffered. Since both parties are giving up all known
and unknown claims against the other party, care should be taken to ensure that the parties are fully
aware of their rights. Normally both parties simply release the other from future liability. However, if
one party is more at fault they can be asked to give extra consideration (compensation).
N-400 Application for Naturalization
The N-400 Application for Naturalization is a US Citizenship form. Permanent residents of the United
States, who meet certain requirements, can apply for United States Citizenship using this form. The
N-400 Application for Naturalization is also known as USCIS Form N-400, Form N-400, Immigration
Form N-400, or simply N 400.
NSF stands for “not sufficient funds.” A NSF check happens where a check has been drawn on an
account with insufficient funds to meet the value of the check, or against a closed account.
The process by which U.S. citizenship is granted to foreign citizens or nationals after they fulfill the
requirements established by Congress in the Immigration and Nationality Act (INA).
Net Ticket Sales
The revenue generated from ticket sales after expenses have been deducted.
Generally, a non-competition clause is inserted into a contract to prevent one party from competing
with another party. The first party has usually gained certain information from the second party or
the first party has sold this information to the second party for use in its business. Also known as a
non-compete clause. In the purchase and sale of business, a non-competition clause is used to
prevent the seller from competing with the purchaser in the same business area for a certain period
of time. In employment contracts, a non-competition clause is used to prevent an employee from
pursuing work in a similar profession or trade or starting a company in competition with its employer
during the employee's employment and for a certain time after the employment is terminated. In
confidentiality agreements, a non-competition clause is used to prevent a party that has been given
confidential information from using that information and competing with the second party in a
certain business in a specific geographical area for a certain time period.
A non-solicitation clause is a clause inserted into a contract to prevent a contractor, employee, or
former employee from soliciting employees or customers away from a company. These parties met
or gained knowledge of these employees or customers while "working" for that company. As such,
they are trying to steal an asset of that company.
Notarial acknowledgment refers to an acknowledgment from a Notary Public as to the execution of a
document. In the acknowledgment, the notary public certifies:
- That the signer personally appeared before the notary public on a certain date and in a certain
- As to the identity of the signer (personally known or upon satisfactory evidence).
- That the signer acknowledged executing the document.
A notary public is a state-appointed official who is authorized to authenticate the signing of a legal
document by verifying the identity of the persons that sign the document.
A formal announcement, notification, or warning. With regards to employment, notice refers to a
period of time prior to the termination of an Employment Agreement. In some circumstances the
employer may terminate the employee without notice if there is sufficient "cause". In most
jurisdictions if one's employment is terminated with cause, there is no requirement on the part of
the employer to provide notice or pay in lieu of notice. However, the employer must ensure that the
reason for termination is properly communicated at the time of termination. Some examples of
cause are dishonesty, disloyalty, insubordination, lateness/absenteeism, disruption of business of
affairs, alcohol or drug use, incompetence, neglect of duty, criminal or immoral conduct and sexual
harassment. Note that the employer may have to prove to a court (or other tribunal) that there was
sufficient cause for termination.
Notice of Intent to Vacate
A Notice of Intent to Vacate is a form used by a tenant when the tenant has entered a fixed term
lease with the landlord, and the tenant has opted to leave the premises when the term of the lease
Notice of Lease Violation
A Notice of Lease Violation is a notice used by a landlord to alert a tenant that one or more terms of
lease have been violated. The notice states how much time the tenant has to correct the violation.
When a tenant has not paid his or her rent, a Notice to Pay is used instead of a Notice of Lease
Notice of Termination by Landlord
A Notice of Termination by Landlord is a notice used by landlords to end a periodic tenancy or a
tenancy where the lease requires advance notice of termination.
Notice of Termination by Tenant
A Notice of Termination by Tenant is a notice used by a tenant when the tenant has a valid reason to
end a periodic tenancy or a fixed term lease (e.g. landlord refuses to make repairs).
Notice of Withdrawal from Partnership
A Notice of Withdrawal from Partnership is a document that gives notice to a partner, a partnership
or the rest of the members of a partnership when a partner is withdrawing from a partnership for
voluntary reasons or when a partner is being removed from a partnership for involuntary reasons.
Notice to Enter
Notice to Enter refers to a notice of a landlord’s intention to enter a leased property for a certain
purpose (such as an inspection or repair). A landlord usually does not have the right to enter a leased
property unless there is an emergency, for example a fire or gas leak, or unless the landlord gives the
tenant proper notice as defined by statute. So long as the proper notice is given, a tenant cannot
refuse entry to a landlord. Some statutes also provide what hours a landlord can enter the premises.
Notice to Increase Rent
A Notice to Increase Rent is a notice given by a landlord to a tenant when the landlord wishes to
increase the rent charged on the premises.
Notice to Pay Rent
A Notice to Pay Rent is a notice given by a landlord or property owner to a tenant who has failed to
pay rent on time.
Notice to Quit
A Notice to Quit is a notice given by a landlord or property owner to a tenant when the tenant has:
- failed to pay rent within the required time after it was due.
- caused serious damage to the premises
- caused violence or threats to health, safety of property, or other tenants
- performed illegal activities on the premises (drug use, prostitution, etc.)
A Notice to Quit is a precursor to eviction.
An odometer is an instrument display on a vehicle's dashboard that shows the total number of miles
or kilometers that the vehicle has traveled.
In respect to businesses, officers are members of the upper level management of a corporation that
are appointed to their positions by the Board of Directors. The officers of a corporation include the
president, CEO, secretary, treasurer, and other individuals in similar positions. Officers are
responsible for managing the daily operations of a business. Even a small corporation has to have
officers such as president and secretary/treasurer.
Option to Purchase
An option to purchase refers to a lease which allows a tenant to buy the rented property at an
agreed price during a lease term. Usually the tenant pays the landlord a non-refundable option
deposit and in exchange the tenant has the exclusive right to buy the property from the landlord. If
the Tenant takes advantage of the option, the Tenant's option deposit will go towards the purchase
price of the property. If the Tenant does not take advantage of the option, the Landlord will get to
keep the deposit and neither party will have any further rights or claims against each other
concerning the option.
Ordinary Power of Attorney
An ordinary Power of Attorney is a power of attorney which becomes invalid upon either the mental
incompetence or death of the principal/donor. An ordinary power of attorney is only valid as long as
the principal/donor is mentally capable of acting for him or herself.
Any hours worked beyond the standard amount in a pay period. If the employee is paid an hourly
wage, he or she will usually receive extra pay for overtime (e.g. time and a half).
Par value is the nominal or face value assigned to a share. Currently, a share is typically issued
without par value. Par value does not necessarily reflect the amount paid for share nor its current
market value. Par value does not represent the redemption amount for redeemable shares. It is still
used by some states however as a method to calculate the capitalization of the corporation (Par
Value multiplied by number of shares issued).
Partial Repayment of Debt Release
A Partial Repayment of Debt Release is a general release tailored for use as a debt settlement
between two parties. The Releasing Party agrees to accept less than they are legally due as a trade-
off for reaching a final settlement. Generally, this release is used for disputes resulting from the sale
of goods or services.
A partnership is a form of business organization in which two or more individuals manage and
operate the business with a view to making a profit. Each partner shares a fixed proportion of the
partnership profits and losses. Depending on the type of partnership, each partner may be personally
liable for the debt and obligations of the company. One benefit of a partnership is that partnership
income is only taxed once. Partnership income flows through to the individual partners who will be
taxed on their partnership income. This contrasts with a corporation where income is taxed at two
levels. Corporation income is taxed twice: first as a corporate entity and also at the shareholder level
where shareholders are taxed on any dividends received.
A Partnership Agreement is a formal contract between two or more individuals or entities that
establishes a business partnership. The partnership agreement sets out the rights and responsibilities
of the partners.
A Partnership Amendment is used to add, modify, or delete terms of an existing partnership
A patent is the exclusive right of an inventor, as granted by the government, to manufacture, use or
sell an invention, method, process or the composition of a substance for a certain period of time.
Patent infringement occurs when a person without authority makes, uses or sells any aspect of a
registered patent (product, idea or concept).
A percentage lease is a specific type of rental arrangement that applies mainly to retailers, especially
in shopping centers or multiple-tenant malls. In a percentage lease, the tenant pays a fixed or base
rent plus a percentage of gross income, sales or revenue.
A Performance Agreement is a contract used to hire musicians, comedians, magicians, and other
performing artists for specific performances. Also known as booking agreement or personal
A periodic tenancy is a lease where there is no definite or fixed termination date. A Notice of
Termination is required to end a periodic tenancy lease.
A permanent coma is a profound state of unconsciousness caused by disease, injury, poison, or other
means, and for which it has been determined that there exists no reasonable expectation of
Persistent Vegetative State
A persistent vegetative state is a permanent and irreversible condition in which a person makes no
voluntary actions and demonstrates no evidence of having thoughts, is unable to communicate, and
is unaware of his or her own existence.
Generally, a Personal Guarantee is where a third party guarantees the financial obligations of a
person under a contract. Also known as a personal guaranty. In lending, a Personal Guarantee is a
guarantee in which an individual agrees to be responsible for the financial obligations of a debtor or
borrower to a lender, in the event that the debtor or borrower fails to pay an amount owing under
the loan agreement. In leasing, a Personal Guarantee is where a third party guarantees the payment
of rent by the tenant to the landlord. If the tenant fails to pay the rent, the landlord can go after the
guarantor for any amounts owing under the lease.
A personal injury is an injury, either physical or psychological, that a person has suffered as the result
of an accident. A person who suffers a personal injury due to an accident that was the fault of
someone else may be entitled to compensation from the party who’s negligent conduct caused the
A tag-along clause (or piggyback rights) protects minority shareholders in the event of a third party
buyout. If a majority shareholder sells his/her shares to a third party, the minority shareholder has
the right to become part of the transaction and sell his/her shares to the same third party purchaser
at the same price and on similar terms. Thus, the third party, if they wish to purchase the shares,
must be prepared to purchase ALL of the outstanding shares. The benefit to the minority shareholder
is that they can avoid being in business with an unwanted new co-owner. It also ensures that all
shareholders will receive similar buyout offers and protects small shareholders from being forced to
accept much less attractive offers. A shortcoming of tag along rights is that it may cause delays in the
sale of shares.
Power of Attorney
A Power of Attorney is a document that grants someone else (called the Attorney-in-fact) the power
to act on your behalf on matters that you specify. A power of attorney allows your attorney-in-fact to
do anything you (the Principal) can do yourself, with a few exceptions—such as areas where you
possess specialized skills that your attorney-in-fact does not (for example, if you are a dentist, you
cannot authorize your attorney-in-fact to practice dentistry on your behalf). Typically, however, a
power of attorney is used to grant the attorney-in-fact decision making power over your financial and property matters. You may place limitations on what your attorney-in-fact may or may not do
when creating a power of attorney.
Preconditions to Employment
Preconditions to employment are conditions that a prospective employee must meet in order to be
hired by an employer. Common preconditions of employment include signing an employment
contract, passing a drug/alcohol screening test, agreeing to a criminal record check, providing a letter
of reference, and providing proof of work eligibility.
Premises refers to a building and its land, or part of a building and its land. In leasing, premises refers
to the area or space that is being leased under the lease agreement.
A Prenuptial Agreement is a written contract between a couple prior to their marriage, outlining the
terms of the marriage should it dissolve. A prenuptial agreement is typically used to outline issues
regarding personal assets, property, and spousal support.
A president is an executive officer of a corporation and is usually responsible for the day-to-day
operations of the corporation. The president will report to the board of directors.
In finance, a principal is a sum of money owed as a debt, upon which interest is calculated. In Power
of Attorney and Health Care Directive documents, the principal generally refers to the person who is
creating a document, such as a power of attorney or a health care directive. The principal is the
person who will be requiring someone else to act on his or her behalf. The principal must be an adult,
and must be “sound of mind” and capable of making his or her own decisions at the time that he or
she signs the document. Also known as a donor. In commercial law, a principal is a person who
authorizes an agent to create one or more legal relationships with a third party on the principal's
A private corporation is a corporation owned by a small number of people through a limited issue of
shares in the corporation. The shareholders may also participate in the management of the
corporation. There is no public issue of shares and as a result there is no public market to trade
shares. A private corporation is the opposite of a public company. A private corporation typically
relies on an exemption from registration and prospectus requirements under any securities
Probate is the legal process of proving the validity of a will, appointing an executor and settling the
estate of a deceased person by resolving claims and distributing the residue of estate.
A probationary period is a limited period of time after the employee commences work during which
either party has the right to terminate the agreement. In some jurisdictions, termination can occur
without notice or compensation (other than wages owed for hours of work already completed).
Many employers require their employees to successfully complete a probationary period before
offering them a longer term position. A typical probationary period is three months.
Profit and Loss Allocation
Profit and loss allocation refers to the different percentage of a partnership’s losses and profits that
different members of the partnership may be responsible for and entitled to.
A Promissory Note is a legal document evidencing that a borrower will repay a loan to a lender under
the terms agreed upon in the note. A Promissory Note is also known as an I.O.U. or a Loan Note. A
promissory note is a very simple loan agreement.
Proof of Service
Proof of service is evidence that can be introduced into court to verify that the landlord or tenant did
in fact receive a copy of the document. Anytime a process server or court official is used to deliver a
notice to the landlord or tenant, it is advisable that you request a proof of service.
Prorations are expenses or credits that are shared proportionately between a buyer and a seller as of
the closing date.
An alien (foreigner) who has become or is likely to become primarily dependent on the government
A public company is a company that is owned by the general public and whose shares are publicly
traded through a listing on a stock exchange. Unless an exemption is available, the issue of any
shares of a public company must comply with the applicable securities legislation.
Publicly Held Corporation
A publicly held corporation is a corporation owned and freely traded by many persons including the
general public. A publicly held corporation will also have to comply with additional securities laws
A Purchase Agreement is a contract where a seller promises to sell goods or services and a buyer
promises to purchase them. Also known as a Sales Agreement.
A Purchase Order is a form used by a buyer to order or requisition goods or services from a seller.
Purchase Order Date
The purchase order date is the date that a purchase order is created by a customer.
A Quitclaim Deed is a deed that transfers whatever ownership interest a grantor has in a particular
property. It does not warrant good clear title free from any encumbrances not listed on the deed.
A quorum is the minimum number or percentage of participants required in order to hold a meeting
and transact business.
A material’s R-Value is the resistance that material has to the movement of heat. The higher the R-
value of building material, the better a house will be insulated against the cold or the heat. The R-
value of a material can be found by looking on the packaging or by phoning the manufacturer.
Real Estate Purchase Agreement
A Real Estate Purchase Agreement is a sales agreement for completed homes. LawDepot’s Real
Estate Sale Agreement deals with new houses (construction completed). It contains additional
disclosure forms, if required.
Real Estate Sales Validation Questionnaire
A form created by the Kansas Department of Revenue that is designed to help study the relationship
between assessed and market values of property. It is required for real estate transactions involving
land located in Kansas, unless the property qualifies for an exemption.
A registered agent is a representative of a corporation for the purpose of receiving service of process
and important tax and legal documents on behalf of the corporation. The state requires that each
corporation be represented by a registered agent. This will ensure reliable communication between
the corporation and the state. The agent must have a physical office within the state. The registered
agent may also be referred to as an Agent for Service of Process.
A registered office is the physical street address within the state where the registered agent of a
corporation can be contacted during normal business hours for service of process.
Regular Dissolution (California)
A regular dissolution is the typical type of divorce in California. This is the type of divorce that will
occur if the couple has any children together, or has significant shared property and/or debt.
A releasee is a party that is being released from a claim by a second party (the releasor) in exchange
for something of value.
A releasor is a party that is releasing a possible claim against a second party (the releasee) in
exchange for something of value.
If a prospective employee will need to relocate his or her home in order to accept a job offer from an
employer, the employer may offer to help compensate the employee’s moving costs by providing a
The expulsion of an alien from a country or state. This expulsion may be based on grounds of
inadmissibility or deportability.
Generally, a renewal option is a clause in a contract that allows one or more parties to the contract
to renew the contract for a term of a predetermined length. A Music Recording Contract will have an
initial recording period which consists typically of the time required to create and distribute one
album. The recording company may request the right to option or renew the contract for one or
more subsequent albums. This option is usually at the complete discretion of the recording company.
A rerent levy is a fee charged by a landlord to recover the lost rental income and costs associated
with finding a new tenant when a tenant has broken the lease conditions and vacated prior to the expiry of the lease term. Rerent levy charges are usually only made when the term of the lease is six
months or more. Some jurisdictions do not permit the landlord to charge a rerent levy. The amount
charged must be reasonable given the circumstances, and must not exceed the damages that the
landlord expects to suffer from the tenant leaving early.
Resident Canadian means a natural person who is:
- a Canadian citizen oridinarily resident in Canada,
- a Canadian citizen not ordinarily resident in Canada who is a member of a prescribed class of
- permanent resident within the meaning of the Immigration Act of Canada and ordinarily resident
A Residential Lease is a legally binding contract made between a landlord and a tenant for a
residential (housing) purpose. The lease gives a tenant the right to use certain residential property in
exchange for money paid to the landlord. Additionally, the lease outlines the rights and
responsibilities of both the landlord and tenant during the lease term.
Residential Services Contract
A residential service contract is a contract from a home warranty company to maintain, repair or
replace all or any part of the appliances, structural components, electrical, plumbing, heating, or air
conditioning systems of residential property. The contract is usually for a period of 1 year.
Residue of Estate
The residue of estate is all of the property owned by the deceased that is not used to pay debts or
given as a specific gift in a Last Will and Testament
Restricted securities are public securities which are not freely tradable due to SEC regulations
(transfer restrictions). Restricted securities should bear a restrictive legend detailing the transfer
A Lawful Permanent Resident (LPR) who has been living outside the United States and is returning to
Revocation of Power of Attorney
If a Power of Attorney document does not specify an end-date, or if the principal wishes to end the
power of attorney early, the power can be revoked with a written instrument of revocation signed
by, or on behalf of, the principal. This document is known as a Revocation of Power of Attorney. The
principal must have mental capacity when he or she executes a revocation of power of attorney.
Right of First Refusal
A right of first refusal confers on one party to an agreement the primary right to extend or renew a
contract or a term or warranty within that contract. For example, when an existing shareholder
wants to sell his shares, all shares must first be offered to existing shareholders on a pro rata basis,
which enables the existing shareholders to maintain their percentage stake in the Corporation,
before being sold to an outside third party. It also protects existing shareholders from unwelcome
new shareholders. However, if the existing shareholders cannot afford to buy the shares, the shares
may still be sold to the third party and existing shareholders may end up with a new co-owner. One
shortcoming of the right of first refusal is that it may cause delays in the sale of shares.
Right of Inspection
A Right of Inspection is a document that outlines who has the right to inspect corporate documents
and the specific documents that can be inspected. Inspection rights may include the right to inspect
corporate property, facilities or equipment. Typically a Right of Inspection document provides
directors with a nearly absolute right to inspect corporate documents, and gives members or
shareholders a wide but more limited right to inspect documents, and may require them to provide a
proper reason before being allowed access. A Right of Inspection usually includes a right to copy
documents, for which a reasonable fee may be charged. Either the individual requesting the
inspection, their agent or their attorney may perform the inspection.
Right of Survivorship
The right of a survivor to receive the property of the deceased. In general, it is the difference
between joint tenancy and tenancy in common.
Riparian matters are legal rights (such as access to and use of the water) that a property owner has in
relation to bodies of water, such as streams, rivers and lakes, which are located on or adjacent to the
A Roommate Agreement is a contract made between the residents of a rental unit. The agreement
outlines the terms, conditions and responsibilities agreed to by each of the residents. Roommate
agreements are sometimes referred to as roommate contracts. LawDepot provides a written
Sales Listing Form
In West Virginia, a Sales Listing Form must be completed and delivered to the tax commissioner for
every transfer of real estate. It must contain information such as the tax map and parcel number of
the property, the district or municipality in which the real property lies, the address of the property,
the amount and form of consideration, and any other financing arrangements. It must also contain
one of the following: a) the names of the grantor and grantee, and the deedbook and page number;
b) the source of the grantor's title, if known; or c) a description of the property and the name of the
person to whom real property taxes are assessed as set forth in the landbook prepared by the
Satisfaction of Mortgage
A Satisfaction of Mortgage is a document signed by a mortgagee acknowledging that a mortgage has
been fully paid by the mortgagor and that the mortgage is no longer a lien on the property. In order
to clear the title to the real property owned by the mortgagor, the Satisfaction of Mortgage
document must be recorded with the County Recorder or Recorder of Deeds. If the mortgagee fails
to record a satisfaction within the set time limits, the mortgagee may be responsible for damages set
out by statute.
A secretary is an executive officer of a corporation who is responsible for maintaining records of the
corporation such as minutes of meetings, shareholders lists, etc.
Generally, a security interest is an interest in real or personal property that is given to the seller to
secure the payment of an obligation owed by the purchaser. The holder of the security interest can
obtain the secured property in the event of a default. In regards to lending, a security interest is an
interest in property that is granted to a creditor. This is normally used to obtain a loan that the
creditor would not be willing to give without some sort of security. A security interest may also be
created by an operation of law to ensure the performance of the obligation where a debtor has
defaulted on a debt.
A Legal Separation is a court order or written agreement authorizing a married couple to live
separate and apart. It does not dissolve the marriage, but can be used to resolve financial matters
between the couple. A legal separation is often the first step toward divorce, and in some
jurisdictions a legal separation must occur before a divorce can be granted.
A Separation Agreement is a document that outlines the terms of a legal separation. It is typically
used to resolve matters involving shared property or finances.
A Serial Number is a unique number assigned to a product for purposes of identification. Most
equipment is assigned a Serial Number which can be used to identify a specific piece of equipment
from all other pieces of equipment.
In the USA, a Service Agreement is a contract, either written or verbal, which sets out the terms and
conditions for service between a customer and the service provider. A service agreement may
sometimes be referred to as a contractor form, an independent contractor agreement, a contractor
agreement, or a freelance agreement. In the UK, a Service Agreement is a formal employment
contract for management and other executives in a corporation.
A service mark is a word, phrase, logo, symbol, color, sound or smell used by a business in the sale or
advertising of services to identify the services and distinguish them from the services of others.
Services in Exchange
‘Services in exchange’ is a phrase used to indicate that one party will provide services to a second
party in exchange for something of value similar to bartering. The services in exchange can be in
addition to a cash portion of the purchase price.
A severability clause allows a court to remove a clause from a document where that clause would
otherwise make the document unenforceable. Some jurisdictions do not allow the operation of
severability clauses in certain specific agreements.
A share of stock is an ownership unit for a corporation. Shares are sold in exchange for cash or other
considerations in order to raise capital to start or expand the corporation. There must be at least one
class of share issued. Different classes of shares may be assigned different privileges such as right to
vote on management issues as well as the right to participate in the sale of assets if the corporation
A shareholder is a person, business entity or institution that owns at least one share in a corporation.
Shareholders are the actual owners of the corporation. As an owner, the shareholder has the
potential to profit if the corporation is doing well but also has the potential to lose their investment if
the corporation goes broke. A shareholder is not personally liable for the debts and obligations of the
corporation. If a corporation goes broke (worst case) the shareholder may get little or nothing as an
equity holder in the corporation. Other secured creditors such as banks and bond holders would be
paid first in the event of the liquidation of the assets of the corporation.
A Shareholder Agreement is an agreement between all or some of the shareholders (or stockholders)
of a corporation. This contract establishes the rights of shareholders and the duties and powers of
the Board of Directors and management. A Shareholders’ Agreement is very beneficial when the
Corporation is closely-held or there are only a few shareholders. Also known as a stockholder
agreement. A typical shareholders’ agreement might do some or all of the following:
- determine rights related to the sale, issuance or subsequent distribution of shares (e.g. rights of
first refusal, piggyback rights and pre-emptive rights);
- set out the rights and duties of the officers and other management;
- create options to buy or sell the shares (a shotgun clause);
- determine what will happen in case of death, retirement, etc., of a shareholder (with the value of
the shares to be calculated according to a certain formula);
- establish the number of Directors on the Board and their duties;
- provide existing shareholders with the right to approve future shareholders.
Shareholder Loan Agreement
A Shareholder Loan is a loan issued by a shareholder to the corporation. The shareholder becomes a
creditor of the corporation in relation to the loan.
The ship date is the date that ordered goods are actually shipped.
Under Maine law, the Shoreland Zone is defined as land that falls within 250 feet of the normal high-
water line of large bodies of water, within 250 feet of the upland edge of non-forested freshwater
and coastal wetlands or within 75 feet of certain streams.
A shotgun clause provides an escape mechanism for shareholders if there is a serious dispute that
cannot be resolved. One shareholder may offer to buy the other shareholder's shares for a certain
price. A shotgun clause stipulates that the other shareholder may either sell his/her shares at that price, or buy the offering shareholder's shares at that same price. This process provides incentive for
the offering shareholder to name a fair price. However, if shareholders have unequal financial
resources, one shareholder could specify an unfairly low price, knowing that the other shareholder
cannot afford to buyout the offered shares. The offerer could then turn around and buy the shares of
the weaker shareholder at the unnaturally low bid. The shotgun clause, therefore, might also require
that a fair price be set for any buyout offer.
Generally, signing incentives are bonuses that are given by one party to a contract to increase the
likelihood that the other party(s) will sign the contract. In leasing, signing incentives are bonuses that
a landlord gives to a tenant, typically for either signing a lease or signing a fixed term lease. Bonuses
may include a free month's rent or a rent decrease for a few months of the fixed term tenancy. If the
tenant breaches the lease, these incentives may have to be paid back to the landlord.
Social Security Number (SSN)
A nine digit number issued by the Social Security Administration to citizens, permanent residents,
and temporary working residents to track individuals for taxation purposes.
Software License Agreement
A Software License Agreement is a contract between a software developer or vendor and the
purchaser of a computer software license that specifies how the software may be used. Software
License Agreements are designed to protect the copyright holder by preventing unauthorized use,
reproduction, or modification of the software. The Software License Agreement also defines the
warranties and support available to the user and defines the limits of the software publisher's
liability for any flaws. Software License Agreements are also referred to as End User License
Soil remediation is the process of removing, reducing or neutralizing industrial soil and sediment
contaminants that threaten human health and/or ecosystem productivity and integrity.
When a parent or guardian has sole custody of a child, it means that they have the legal right to
make all childcare decisions for the child without having to consult the non-custodial parent.
Sole ownership is an ownership in property by one person or entity.
A sole proprietorship is the simplest form of business entity. In a sole proprietorship there is only one
owner (the sole proprietor) who operates in his or her personal capacity. The sole proprietor risks
unlimited liability for the debts and obligations of his or her company. This means that all of the sole
proprietor’s personal possessions are at risk if the business should fail or be sued. One benefit of a
sole proprietorship is that it enjoys a single level of taxation. This means that the sole proprietor will
pay personal income taxes for the profits made by the business.
Source code is a set of computer commands written by programmers when creating a program.
Source code is the language of the computer program as created by the programmer, and is the part
of the software that humans can read. The Source Code must be translated into a computer-readable
form before the computer can execute the commands.
A specific gift or bequest is a gift of a specific item of property or sum of money to a named
beneficiary in a Last Will and Testament.
Specific Performance is a remedy granted by a court to compel a contractual party to fulfill its
obligations under a contract.
In immigration law, a person who completes and files an Affidavit of Support on behalf of a
Statutory Disclosure Requirements
Statutory disclosure requirements vary from state to state, but generally the seller is required to
disclose any known defects in the physical condition of a property that may materially affect its
value, including items such as malfunctioning appliances, pest control problems, mold problems,
structural issues with the home, roof defects, etc.
Stop payment refers to an order of an account holder to its bank to cancel a certain check that has
been issued but not cashed. The receiver of a check will not be able to cash the check where the
payment on it has been stopped.
A sublandlord is a person (tenant) who entered into a lease with a landlord and who later subleases
the landlord’s property to a subtenant.
A sublease occurs when a tenant gives possession of a portion of the leased space (e.g. a room in a
house) or a portion of the term of the tenancy (e.g. for 5 of the remaining 6 months of the lease) to a
third party. The original tenant retains whatever rights under the lease he or she has not transferred
to the third party, and also retains most of his or her obligations under the lease. The original tenant
can still be sued by the landlord for lease violations. Typically, the original lease would require that
the tenant get the landlord's consent to this sublease.
A Commercial Sublease is used to convey the leasing of a premises by a lessee to a third party for
part of the lessee’s remaining time of the original lease.
A Residential Sublease is used to convey some or all of the property rights that a tenant has under a
residential lease to a third party for a portion of the tenant’s remaining term of the original lease.
A subtenant is a person who enters into a sublease from a person (tenant or sublandlord) that has
previously leased that property from a landlord.
Summary Dissolution (California)
A summary dissolution is a quick and simple way to get divorced in California. However, not all
couples will qualify for a summary dissolution. In order to qualify, the following criteria must be met:
the couple must have no children together, they must have minimal amounts of shared property
and/or debt, and they must agree on the terms of their divorce.
A surety is a person who agrees to pay any losses directly to the landlord should the tenant be unable
to pay the rent, or otherwise breaches the tenancy agreement.
A temporary guardian is a person who is granted temporary, but not permanent guardianship of a
child. Generally, temporary guardianship is granted for children whose parents are, for whatever
reason, temporarily unable to care for them.
Tenancy at Sufferance
In the context of home buying, the term "tenancy at sufferance" refers to the situation where the
owner of a property does not have possession. It can occur when a Seller retains possession after a
deal has closed and title has been transferred to a Buyer, or where the Buyer receives possession
before closing and the Seller still retains title to the Property.
Tenancy by Entirety
Tenancy by entirety is a form of ownership by husband and wife whereby each owns the entire
property. Neither spouse can deal with the property without the consent of the other. One main
benefit is that the creditors of one spouse cannot enforce against the property held in tenancy by
entirety unless the non-debtor spouse dies first. In the event of death of one spouse, the survivor
owns the entire property without the need for probate. However, it will be difficult to transfer the
property if one spouse disappears or becomes incompetent since the other spouse cannot
unilaterally sever tenancy by entirety.
Tenancy in Common
Tenancy in common is an undivided ownership in real estate by two or more persons. The interest
need not be equal, but unless the interest is expressed it is assumed to equal. In the event of the
death of one of the owners, there is no right of survivorship in that owner's interest. Instead, the
deceased’s interest will pass to his or her heirs.
A tenant is a person who is leasing either land, a building, or part of a building from a landlord.
A terminal condition is a condition caused by injury, disease, or illness, from which there is no
reasonable medical probability of recovery and which, without treatment, can be expected to cause
A testator is a male or female person that has signed (created) a Last Will and Testament.
A testatrix is a female person that has signed a Last Will and Testament. The term testatrix is
becoming less popular and testator is often being used to refer to both male and female creators of
Title is an owner's interest in a piece of property including the right to control and dispose of it. Title
may also refer to a formal document that serves as evidence of ownership in the property.
Title insurance is a form of insurance in which the insurer agrees to indemnify the insured party for
any loss suffered that results from a defect in the title to the property that was unknown to the buyer at the time of the sale. A title policy of insurance insures the homebuyer against any
encumbrances that may affect the title to their property. The policy is required by most institutional
lenders in order to get a mortgage and will pay the value of the mortgage in the event that there is a
defect in the title that voids the buyer’s title to the property. It is an alternative to getting a municipal
compliance certificate or real property report.
A trade name is the name under which a company conducts business, or by which it distinguishes its
commercial products or services. A trade name may or may not be registered as a trademark.
Trade Name Assignment
A Trade Name Assignment is used to legally transfer all rights of a trade name from one party to
another. Both registered and unregistered trade names can be assigned.
A trademark is a name, word, letter, symbol, figure, or mark used by a manufacturer or merchant in
order to brand its goods and distinguish them from similar goods manufactured or sold by others. A
trademark can be registered with the Patent and Trademark Office.
A Trademark Assignment transfers the entire ownership rights of a trademark from one party to
another. If the trademark is registered federally in the USA, the assignment must be recorded with
the Patent and Trademark Office within 3 months of assignment or it is possible that a subsequent
purchaser who does not have notice of your assignment could have a claim to the trademark. Similar
precautions should be taken for trademarks that are registered in state registries.
Trademark infringement is where a trademark infringes or is confusingly similar to an existing
trademark. Typically, the person infringing can be forced to stop using the trademark and might have
to destroy all materials bearing that trademark. A trademark search minimizes the potential losses in
adopting and using a new trademark.
Transfer tax is a tax that is required by state law to be paid when real estate is sold.
A treasurer is an executive officer of a corporation responsible for supervising the accounting
functions of the corporation and for keeping accurate and current financial records for the
A triple-net lease is the most common form of Commercial Lease. A triple-net lease can be used for
retail, office, warehouse and industrial properties. The tenant is responsible for all of the costs of
operating the building (including repairs and maintenance) in a triple-net lease.
Unilateral No Fault Divorce (Pennsylvania)
This type of divorce requires an Affidavit from one party stating that the marriage has broken down
and that the parties have lived separately for two years. However, this is not necessarily an
uncontested divorce (the other party can contest these grounds), so we suggest that you consult a
lawyer if you wish to proceed with a Unilateral No Fault Divorce.
Unimproved property is land without significant buildings, structures, development, or site
preparation. In essence, unimproved property is a raw piece of land.
Unit of Measure (UOM)
Items are often sold by a specific unit of measure. For example, nails may be sold by the pound and
hats may be sold by the dozen.
Unlawful Detainer Action
Unlawful detainer action refers to a legal action to evict a tenant who remains unlawfully in
possession of a rental property despite the expiration or termination of the lease. Also known as
A valuation clause provides a method to determine the value of a Corporation's shares. Such a
process is needed when shareholders want to sell their shares or when a shareholder dies and the
other shareholders want to buy those shares. Since most small corporations are private (not traded
on a stock exchange) the shares are hard to value without a predetermined method. Having this clause will reduce the disagreement and uncertainty that occurs when a shareholder wants to buy or
Vehicle Information Number (VIN)
A Vehicle Information Number is an alpha-numeric number that is assigned to every vehicle. VINs are
used in New Zealand, Australia, Europe, the United States, Canada and other countries. Vehicles that
have been manufactured since 1980 will contain a VIN that is 17 characters long. The VIN can be
used to determine information about a vehicle, such as the country and year of production,
manufacturer, style, make, model, engine type, etc. It is usually located in the door frame of the front
doors, on the engine, around the steering wheel, or on the dash near the window. No two vehicles in
the world have the same VIN number, so the VIN number clearly distinguishes one vehicle from all
Veterans Administration (VA)
The Veterans Administration (VA) provides housing mortgage loan insurance to qualified applicants
(you have served or are serving in the US military) who get loans from certified lenders in the event
of default by the home purchaser. The program allows those who typically would not be able to
afford a mortgage to qualify for one because the VA will pay the mortgage in the event of a default.
Generally, an endorsement made by an authorized representative of one country to the passport of a
holder that was issued by another country. The visa permits the passport holder entry into or transit
through the country making the endorsement. A U.S. visa allows the bearer to apply for entry to the
U.S. under a certain classification, such as a student, visitor, or temporary worker. A U.S. visa does
not actually grant the bearer the right to enter the U.S.
Voluntary Withdrawal from Partnership
A voluntary withdrawal from partnership occurs when a partner is voluntarily leaving a partnership
and wishes to give notice to the partnership. An example would be a partner selling his or her
partnership interest to another party in order to retire.
A voting trust is where Shareholders agree to give their voting shares to a third party (the trustee)
who holds the shares and will vote the shares in accordance with a voting trust agreement.
A Waiver is an enforceable promise not to proceed with a legal claim in exchange for money or other
compensation. Also known as a release.
Generally, a warranty is an assurance made by one party to a second party that certain facts or
conditions are true or will happen. The second party can rely on the assurance and seek some type of
remedy if the assurance is not true or followed. In sales, a warranty is an obligation that an item sold
or service provided is as stated or implied by the seller. Warranties often provide for a specific
remedy (such as a replacement or a repair) in the event that the item or service fails to meet the
A Warranty Deed is a deed in which the grantor (the seller) fully warrants a good and unencumbered
title to real property to the grantee (the purchaser). A warranty deed is typically used in most real
estate transfers as it provides the greater protection than a quitclaim deed.